City Council recently approved taking on the amount as debt to finance new treatment plant

By Nick Morgan, Rogue Valley Times

Ashland resident Dean Silver hopes to gather roughly 800 signatures from voters by the middle of May as part of a petition campaign seeking to give voters — rather than City Council — the say in the city’s largest-ever bond.

Public Works Director Scott Fleury, however, has described the $75-million proposal — known as Resolution 2024-05 — to finance construction of a new water treatment plant as a “bond that’s not really a bond.” He characterizes the word “bond” as a label required under Oregon law and the proposal as a necessary step toward a low-interest, long-term infrastructure grant through the U.S. Environmental Protection Agency.

Silver called the label “just kind of a technicality.” He focuses on the debt amount, which is well into the eight figures.

“The bottom line is it’s a $75-million debt,” Silver said. “Once a project is funded it’s really hard to make any changes or reconsider.”

City Council approved the resolution 5-1 on March 5 — the latest chapter in a complicated saga that goes back to when the council in June 2016 approved a $14.8-million loan with Business Oregon’s Infrastructure Finance Authority covering design and construction.

In fall 2021, the city’s public works and finance departments began discussions with the EPA to fund the project through the Water Infrastructure Finance and Innovation Act program. WIFIA provides “long-term, low-cost supplemental loans for regionally and nationally significant projects,” according to the agency’s website.

The WIFIA program covers 80% of a project’s costs. The city’s matching 20% funds come from land values and expenditures, according to city staff reports earlier this month.

The council in July 2022 approved a resolution to reduce its loan with the state in favor of working with the EPA. In September 2022, the council approved Resolution 2022-29 authorizing the borrowing of $44 million from the EPA.

Fleury came to the council March 5 to repeal the $44-million resolution and replace it with Resolution 2024-05 authorizing the city to seek a bond of $75 million based on a new maximum the EPA will loan Ashland through the WIFIA program.

That $75 million is higher than the final amount, Fleury told councilors earlier this month and in an email exchange this week with the Rogue Valley Times. The most recent estimates that HDR Engineering provided to the city in a Summary of Opinion of Probable Construction Cost range from $55.1 to $70.4 million.

“So, if the construction phase of the project is $60 million, the City will only reimburse for that amount, and that will be the amount associated with the final debt/amortization schedule,” Fleury said Wednesday in an email.

Fleury told the council on March 5 that the resolution would allow the city to borrow funds from the federal government at a lower rate and a longer term of 35 years. Further, the WIFIA program allows the city to defer full debt payments until up to five years after completion of the project.

“Typically on infrastructure projects you’re going to get 20, maybe 30 years from state funds, so having that extra term allows for a better rate stabilization to pay that debt service moving forward,” Fleury told the council.

Councilor Gina DuQuenne pressed Fleury that the proposal is a $75-million bond. Fleury countered that the city is not “going out for a bond itself” and is not selling municipal bonds.

“This is a bond that’s not a bond,” Fleury said. “It’s called a bond because that’s the definition in the ORS (Oregon Revised Statutes).”

He added: “It’s basically a debt with the federal government, so it’s a loan from the federal government.”

When City Council passed the resolution, DuQuenne was the sole opposing vote.

Silver said he’s been working to launch a petition campaign taking the resolution to voters since its passage early this month. His statement of organization for petition committee was filed with the Secretary of State’s Office on March 12, but the city only made petition paperwork available early this week after a public notice about the resolution ran Monday on Ashland.news.

The notice had key differences from the resolution passed by council that temporarily had Silver believing he had to double his goal in half the time.

The council’s resolution states that the question of issuing bonds “shall be placed on the ballot at the next lawfully available election date” if the city receives petitions for an election “containing valid signatures of not less than five percent of the city’s electors” by a date “not to exceed 60 days from the publication of notice.”

The public notice had set the signature requirement as “not less than 10 percent of the City’s electors” by April 17, 30 days after the notice’s publication date.

The requirement as stated in the notice doubled the number of required signatures to 1,596 registered Ashland voters. However, Silver contacted the Times Friday evening and said that city officials informed him that he actually had 60 days from the notice to collect 798 signatures, 5% of Ashland’s registered voters.  

Fleury told the Ashland Chronicle earlier this week that the changes stem from “conflicting codes and statutes” that were remedied and clarified by the city’s legal department, and that the delays stemmed from the city recorder working with Jackson County elections officials.

Silver has full faith he can meet the signature deadline. He cited how the proposal is sparking “disgust” and “consternation” on social media — some of it in responses to Silver’s own posts on Nextdoor and the Ashland, Oregon Community Facebook page.

“There’s so much interest — social media is all abuzz,” Silver said. “I don’t see how we could possibly fail.”

“My expectations are we’re just going to kill this.”

Silver has posted that his intention is “to make the city slow down and reconsider the path it has chosen, to decide if it is the best way forward to protect our water supply.”

Silver wants to see the entire electorate reject incurring such a big debt “before determining that it’s the best way to go.”

“I’m hoping if we succeed everybody will stop, take a breath … and confer with the people,” Silver said.

Silver said he’s coordinating the effort, but taking a hands-off approach and allowing anyone who reaches out to him on Facebook to gather signatures.

“I’m not micromanaging it,” Silver said. “I’m letting anyone who wants to be a part of it be a part of it.”

Reach reporter Nick Morgan at nmorgan@rv-times.com or 458-488-2036. This story first appeared in the Rogue Valley Times.

Related story: Planning Commission to review new water treatment plant plans (April 24, 2023)